Re-engagement bears fruit

ZIMBABWE’S re-engagement efforts under President Mnangagwa’s administration have begun to bear fruit with the African Development Bank (AfDB) set to pour millions into Zimbabwe’s private sector.

The multilateral development financial institution, which is engaged in promoting the economic development and social progress on the African continent, last year pledged to mobilise US$8 billion for borrowing to African countries.

Last week, a high powered delegation was sent to Zimbabwe for engagements with the local private sector.

The engagements, which were held under the theme “A new dawn for the Zimbabwe economy. The role of the private sector”, come in the wake of a meeting between President Mnangagwa and the AfDB president, Dr Akinumwi Adesina, in Davos, Switzerland early this the year.

Speaking in an exclusive interview with The Sunday Mail Business on the sidelines of the bank’s roundtable meetings, leader of the AfDB delegation, Dr Abdu Mukhtar who is director Industrial and Trade Development in the bank, said Zimbabwe is a very important cog in Africa’s development matrix.

Dr Mukhtar said Government’s role in business is to create a perfect environment for private businesses to thrive and the Zimbabwean leadership is doing just that, thus presenting a number of opportunities for the private sector.

“Zimbabwe is a very important country not only in the Southern Region of Africa but also in the entire continent,” said Dr Mukhtar.

“So for the African Development Bank, we really want to do things with Zimbabwe, we think that the economy will grow, we think that there are a lot of opportunities, especially in the private sector. In the bank, we have priority areas — industrialisation, agriculture, energy and also improving the lives of people.

“We feel that the private sector will have to play a key role in achieving these. So governments will provide the right policies and the right environment ultimately for the private sector.

“So that’s why we are beginning to engage, we have come with a very powerful team from multiple sectors in the bank —industrial , agriculture, energy and financial services,” he said.

Value of funding

Dr Mukhtar said the bank would invest in every viable project.

He said if by any chance the local private sector comes with many projects which could deplete the bank’s resources, then the bank will use its contacts and international repute to solicit for funding from other international financial institutions or private investors.

Depending on the current stage of the projects, the AfDB director said funds could start rolling into Zimbabwe within the next two to eight months.

“There is really no standard or formula (on when funding will start coming), it really depends on how viable those projects are. Now we are going to spend the next two days (up to last Friday) talking to private investors and looking at their projects.

“Some of the projects are at the conceptualisation stage — these ones will take a couple of months to do.

“So anything between two months to eight months I would say but there is no standard rule. It depends on the stage of the project and what has been covered so far.

“We can only be constrained by opportunities. So I don’t want to put any figure on the table, what we can say is if there are projects, no matter how big or no matter how many, if they are good projects, the bank will find ways to finance them.

“As you know, as a bank we have limited resources, but when we find really good projects that we believe in, we don’t have to necessarily finance those projects alone, we co-finance with others,” said Dr Mukhtar.

Progress

Government noted that the AfDB’s financing of the private sector is in line with President Mnangagwa’s drive to industrialise the country as we strive to attain upper middle income status by 2030.

In his speech read on his behalf by Accountant General Daniel Muchemwa, Permanent Secretary in the Ministry of Finance and Economic Development Mr Willard Manungo said Government is on a re-engagement drive and the coming in of the AfDB is evidence of progress.

“The Government of Zimbabwe is prioritising re-engagement with the international community to attract foreign direct investment and I think Africa Development Bank is of direct interest in terms of the re-engagement,” said Mr Manungo.

“The repayment of what we owe is important, but they have already started to support us before we repay what we owe them. That is a sign of progress,” he said.